Amitabh Kant, India’s G20 Sherpa on Tuesday highlighted the country’s remarkable economic progress, stating that India will surpass Japan and Germany to become the world’s third-largest economy within 2-2.5 years. He added that previously considered one of the “Fragile Five” economies, India’s growth has been driven by key reforms such as GST, IBC, and digitization. This upward trajectory is expected to solidify India’s position among the world’s leading economies.
“India was a controlled economy till 1991, it was amongst the Fragile Five economies just a decade back, there was a twin balance sheet problem – both bank and corporate bank sheets and we moved from Fragile Five to Top 5 economies of the World and in 2-2.5 years from now, India will be overtaking both Japan and Germany to be the 3rd largest economy in the world,” Kant asserted.
Crediting this growth to major structural reforms that the government has carried out, Kant said,”India has carried out major structural reforms, GST has seen increased revenue to the government month after month and it cut down huge red tables in our economy. IBC has brought in a lot of credit discipline amongst our entrepreneurs and vast no of cases got settled. There was no discipline in the construction industry but RERA has disciplined them.”He further added that the growth can also be attributed to the ease of doing business in India today.
“India focussed strongly on scrapping a lot of paperwork, procedures, etc. It eliminated over 1600 laws which no other country has done. India brought down the corporate tax levels and this has reflected in improved corporate balance sheets,” the veteran leader said.
He further added that a vast amount of digitisation has happened in India, the country has seeded all bank accounts with Aadhaar and mobile mumber. India does 50 per cent of real time fast payments, ahead of China.
“Fintechs now give credit based on payment history. Startups like Zerodha, groww, helped Indians from tier 2 and tier 3 cities with alot of money which was lying on their savings accounts finding its way to the markets,” he added.
Kant also highlighted how cost of acquisition of customers in India has fallen down significantly, and that the capex spend of the government has increased tremendously.
Amitabh Kant was speaking at the 14th Morningstar Investment Conference in Mumbai.
